Kasen v Mission Cantina, LLC

[*1] Kasen v Mission Cantina, LLC 2018 NY Slip Op 51017(U) Decided on June 20, 2018 Supreme Court, New York County Borrok, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on June 20, 2018
Supreme Court, New York County

Scott Kasen, Plaintiff(s),

against

Mission Cantina, LLC, Defendant(s).



652506/2017



Plaintiff's Attorney: Judd Burstein, Esq. Judd Burstein, P.C. 1790 Broadway, Suite 1501, New York, NY 10019. 212.974.2400.

Defendant's Attorney: Neil Leon Postrygacz, Esq., Yan Margolin, Esq. Law Officies of Yan Margolin 175 Varick Street, New York, NY 10014. 212.964.6200.
Andrew Borrok, J.

Recitation, as required by CPLR 2219(a), of the papers considered on the review of this motion for summary judgment in lieu of complaint

PAPERS NUMBERED

Notice of Motion and Affidavits and Exhibits Annexed 1

Answering Affidavits and Exhibits Annexed 2

Replying Affidavits and Exhibits Annexed 3

Sur-Reply Affidavits

Upon the foregoing cited papers, the Decision/Order on this motion is as follows:

Scott Kasen's (the Plaintiff) motion for summary judgment in lieu of complaint is denied because Plaintiff has failed to establish evidentiary facts that there are actual issues of fact as to whether the Amended and Restated Promissory Note (the Note), dated December 12, 2016, by and between the Plaintiff and Mission Cantina, LLC (the Defendant) which was signed by James Daniel Bowen (Bowen) as Managing Member and CEO of the Defendant was executed in violation of the Section 7.6(e) of the Operating Agreement (the Operating Agreement) of the Defendant.

The Defendant owned a restaurant located at 172 Orchard Street. The Plaintiff is a Class B Investor Member of the Defendant. Plaintiff alleges he made a series of loans pursuant to certain (i) a loan agreement, dated September 15, 2013, by and between the Plaintiff and the Defendant, (ii) a loan agreement, dated February 4, 2014, by and between the Plaintiff and the Defendant and (iii) an additional advance of $50,000, that were consolidated in the note.

Summary Judgment should be granted when the movant presents evidentiary proof in admissible form that there are no triable issues of material fact and that there is either no defense to the cause of action or that the cause of action or defense has no merit. CPLR § 3212(b). The [*2]burden is initially on the movant to make a prima facie showing of entitlement to judgment as a matter of law tendering sufficient evidence in admissible form to demonstrate the absence of any material fact. Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]. Failure to make such a prima facie showing requires denial of the motion. Alvarez v. Prospect Hosp., 68 NY2d 320, 324 [1986] citing Winegrad v. New York Univ. Med. Center, 64 NY2d 851, 476 N.E.2d 642, 487 N.Y.S.2d 316 [1985]. Once the showing has been made, the burden shifts to the opposing party to produce evidence in admissible form sufficient to establish the existence of a material issue of fact which requires a trial. Alvarez v. Prospect Hosp., 68 NY2d 320, 324 [1986] citing Zuckerman v. City of New York, 49 NY2d 557, at 562, 404 N.E.2d 718, 427 N.Y.S.2d 595 [1980].

Pursuant to Section 6 of the Note, the Plaintiff is granted a lien on, among other things, all contract rights and fixtures. Section 10(e) of the Operating Agreement provides that it is a default if any material portion of the collateral comes into the possession of a third party. Plaintiff argues that Defendant is in default of the Note because the Defendant surrendered the leased premises and fixtures pursuant to a stipulation, dated April 19, 2017 by and between the Defendant and Gatco LLC, the Defendant's former landlord.

Section 7.6(e) of the Operating Agreement provides that any new debt of the Defendant must be approved by the Plaintiff, Bowen and Anthony Myint (Myint). The Defendant argues that Myint did not approve of the $50,000.00 new debt extended pursuant to the Note.

Inasmuch as, the Plaintiff is a member of the Defendant he knew of the requirements of Section 7.6(e) of the Operating Agreement and Myint alleges that he did not approve the loan as to the additional $50,000, the Plaintiff has failed to establish evidentiary proof that there are no material issue of fact as to whether the $50,000 of new money advanced pursuant to the Note (i.e., that isn't merely being restated in the Note) was authorized.

Accordingly, the motion for summary judgment in lieu of complaint is denied and the Plaintiff is directed to file a complaint within 30 days entry of this order and to timely serve the defendant in compliance with the CPLR. See CPLR § 3213.

Dated: June 20, 2018

Hon. Andrew Borrok

J.S.C.